Allstate Insurance has agreed to stop considering whether a customer has auto insurance with the company when deciding whether to renew homeowners policies, state officials said.

In late August, the Insurance Department announced that Allstate, and another company, Liberty Mutual, had broken state law when they used auto insurance as a criteria for renewing homeowner policies. Liberty Mutual announced an immediate end to the practice. Allstate officials had said they wouldn't stop, and issued a statement saying the practice was permitted under state law.

The state cited Allstate for the practice and set a public hearing date for Sept. 19. State officials canceled the hearing, but they are engaged "in discussions with Allstate about resolving the issues raised in the citation," the Insurance Department said in a news release.

Insurance Superintendent Eric Dinallo has called the companies practices a form of "consumer coercion."

Allstate spokeswoman Krista Conte issued a statement that affirms the company's belief that it didn't violate state law. "Allstate continues to believe that our practices were in full compliance with the laws of the State of New York," the statement said. "However, Allstate acknowledges and respects the insurance department's authority to interpret and determine violations of New York State insurance law and has advised the department that it intends to comply fully with the department's determination."

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BY KEITH HERBERT

Copyright © 2007, Newsday Inc.

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